“Well you see, bubble’s a complicated term because a bubble to me implies that you’re never going to get your money back,” Cramer said. “People say that there's bubble in bonds – you will get money back just you may not do that well. Bubble in Chinese real estate – entirely possible. The Chinese economy is a growth economy and can sustain a bubble in one area and not others. The gold bubble is what people talk about. They talk about it when gold’s down for a given day but -- I think as our resident gold expert, I mean you could tell us – finding costs have gone up. There’s just not a lot around.”

According to the Cramer, gold’s destination will be $2,000 an ounce. He explained there are fundamentals at play and how modern technology has made it possible for more people to buy gold, causing its price to go even higher, referring to exchange-traded funds (ETFs), like the GLD (NYSE:GLD).

“Depends upon what your long term outlook is,” Cramer explained. “I think gold's going to $2,000. So I mean you know you can buy it – it's like a stock that it's going to 20. You can buy it at 13. It might go buy it at 10. But I just feel like that this supply/demand is right. I was doing some work on how the Exchequer of Britain sold half the gold at $280. And people have poorly timed gold for years. But I do believe that it’s an adequate hedge against inflation. We saw that in Vietnam. In, you know three years ago when their currency was going down and they became the largest importer of gold. We also know that supply and demand are important and I know we'll do another video when you have waxed eloquently about the ETFs but the demand is easily met – you know, purchased in a time when there was demand but you couldn’t really buy it. You know, obviously people wanted it. And the GLD changed that. You know, we talk about that later on.”

To those who call gold a bubble – Cramer claims they’re the traditionally the ones that missed gold going up to its highs early on.

“I think that those who call it a bubble tend to be people missed it,” he said. “And there are a lot of people who missed it. There’s a lot of people who called tops in gold endlessly and I think that's fool's game. I think that there's not a lot of gold.”

The “Mad Money” host likened gold to the increases in the Dow Jones Industrial Average (DJIA) historically and that even though it is hitting these highs, it doesn’t necessarily indicate a bubble, but just a good return on an investment.

“One of the things that that I remember when the Dow went from 1,000 to 2,000 and then to 6,000 – a rally of merely a hundred points didn’t mean merely as much,” Cramer said. “But we tend to not think about it mean your last piece gold is up 17 percent for the year. That’s no great shift. It’s just a good return.”